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Friday, June 13, 2014

The Implications of Curbing US Power Plant Emissions

The new rules curbing power plant emissions in the U.S. will have far
reaching impacts both domestically and around the world. Curbing
emissions from power plants is part of President Obama’s Climate Action
Plan which he announced in 2013. Last September, the Environmental
Protection Agency (EPA) released proposed standards to curb U.S.
greenhouse gas (GHG) from new power plants. On June 2nd of this year,
the EPA announced it will restrict emissions including carbon, nitrogen
oxides, and sulfur dioxide by more than 25 percent by 2030 from all
power plants. The EPA guidelines also include plans to prepare the U.S.
for the effects of climate change, including strengthening roads,
bridges and shorelines.

To
circumvent the obstinacy of Republicans, the President is using his
executive authority and putting forward the new rules under the Clean
Air Act. The historic announcement will reduce carbon pollution from
power plants by almost one third (30 percent) from 2005 levels by 2030.
Even more significantly, they may spur global action that enables us to
secure a binding climate treaty in 2015.
President Obama has previously pledged to reduce U.S. GHG emissions
by 17 percent by 2020 compared with 2005 levels. America is already a
third of the way towards meeting the national average of a 30 percent
reduction in emissions. Some states, especially those in the north-east
have already cut their power plant emissions by 40 percent compared with
2005 and over 1,000 mayors have signed agreements to cut their cities’
emissions.

The new power plant emissions standards are
significant because energy generation is the single largest source of
GHGs, accounting for nearly 40 percent of the emissions that cause
climate change.

Two camps

A number of environmental organizations including the Sierra Club and
the Natural Resources Defense Council lauded the proposal as a
“historic step to combat climate change.” Republicans and business
groups including the National Association of Manufacturers (NAM) and the
Chamber of Commerce are vociferously resisting the new rules saying
they will undermine U.S. competitiveness, hurt the economy and cause an
energy crisis. Ceres and their green investor network heralded the
announcement as “a critical step” to dealing with climate change. A
120-day public comment period will allow both camps to offer their views
before the final rules are released in 2015. We can
expect a fierce battle over the issue during this year’s mid-term
elections.

Coal power

Coal power is going to be substantially curtailed under the new
rules. Even before the new rules were announced about one third of coal
plants online in 2009 have closed or are slated to close. The closure of
coal plants is significant because coal-fired electricity generation is
the most carbon intensive energy source in the U.S. and as such, it is
responsible for the lion’s share of the nation’s GHG emissions. Coal is
responsible for 40 percent of American power generation and 74 percent
of the country’s CO2 emissions from the electricity sector. The new
rules will impact the nation’s 1,300+ coal-fired power plants and
many of these plants are unlikely to be able to meet the new standards.

Flexibility

The new rules have incorporated a good deal of flexibility so
that each state can develop a unique plan based on their differing
energy mixes. In addition to cleaner forms of energy, states can
also choose to focus on energy-efficiency schemes as a way of meeting
EPA standards. States have until 2016 (or 2017 if they need more
time) to come up with a strategy for meeting the targets. The new rules
will come into force in all states in 2020. If states do not submit a
compliant plan, EPA will make one for them.

Legal

There are two legal facets that have a bearing on the new rules for
power plants in the U.S. The first is the Supreme Court’s ruling that
the EPA is obligated to regulate carbon under the Clean Air Act. The
second involves the fact that these new rules are flexible and pay heed
to both technical feasibility and economic impacts. This will make it
more likely that the rules will survive inevitable legal challenges.

Renewable energy and emissions trading

These new rules will drive rapid growth of renewables and clean
energy jobs. In addition to supporting the growth of renewable energy,
the new rules will also help to grow emissions trading programs, under
which renewable energy facilities would receive credits, which could
be sold to coal plants. States can set up their own emissions-trading
programs, or participate in existing programs. Nearly a dozen states
have already implemented their own market-based programs to reduce
carbon pollution. Emissions trading will help to prevent energy
shortages which could occur if all coal plants were forced to close at
once.

Innovation

The new rules will also spur green innovation. A few illustrations were provided in a recent analysis by Lux Research.
This report suggests the rules will contribute to improvements in the
efficiency of natural gas powered turbines, demand for commercial and
utility scale solar power, energy efficiency programs, as well as carbon
capture and sequestration (CCS) for surviving coal plants.

Health and economic benefits

As explained by EPA chief Gina McCarthy, this move will not cause
energy prices to skyrocket, in fact it will save vast sums of money from
medical bills associated with pollution. Coal-fired electricity
generates airborne toxins like mercury, which causes neurological
problems, and sulfur, which contributes to respiratory ailments. It has
been repeatedly demonstrated that curbing pollution will reduce
medical problems and premature deaths.

While all Americans will benefit from the new rules, the most
vulnerable communities stand to benefit the most from the new rules.
This includes people of color, the elderly, and those in low income
communities. The plan will help to reduce asthma among black and Latino
youth who are twice as likely to be hospitalized for this condition and
four times as likely to die than their white peers.

“In just the first year that these standards go into effect, up to
100,000 asthma attacks and 2,100 heart attacks will be avoided — and
those numbers will go up from there,” President Obama said. Overall, the economic value of these savings far outweigh the tiny increases in costs.

Global impact

The new rules will enhance the U.S. bargaining position at
international climate talks and pressure other nations to get onboard.
The standards give the U.S. government the credibility it requires to
lead international efforts to combat climate change. It may even provide
the impetus to encourage other countries to sign a globally binding
climate treaty by the end of 2015.

As described by Andrew Steer,
the chief executive of the World Resources Institute, the new rules
are a “momentous development” for America’s efforts to deal with climate
change.

“These new standards send a powerful message around the
world that it’s time to face the global threat of climate change,” Steer
said.

There is reason to believe that the new rules may already be having
an impact. Just one day after the new rules were released, China, the
world’s biggest greenhouse gas emitter, announced that it’s considering a cap on carbon emissions.

Impediments to progress

The fact that Republicans control the House of Representatives means
the President cannot promise to do anything requiring congressional
action. Further, international treaties require ratification
by two-thirds of the Senate and that is highly unlikely. However, we may
be able to see an international agreement that does not require Senate
ratification.

Beyond domestic political resistance, two of the biggest hurdles to a global climate deal may come from Australia and Canada, both of whom are racing to cash in on their fossil fuel reserves. According to a report in the Morning Herald, Australian
Prime Minister Tony Abbott is in the process of putting together an
alliance of British Commonwealth countries to reject a climate
agreement.

Despite the insane lack of foresight from some national governments,
the idea of reigning in emissions represents little more than common
sense. The absence of emission limits is ecologically untenable and
contrary to the short term thinking of some, failing to reign in climate
change is ultimately economic suicide. As the EPA tweeted, “When it comes to climate change, the most costly thing to do is to do nothing.”

The new rules signal the end of coal and the beginning of a cleaner future in the U.S. and perhaps even the wider world.

About Me

Richard Matthews is a sustainability consultant, and the
owner of The Green Market Oracle. Richard is a member of the Society of
Environmental Journalists (SEJ) and he is a regular contributor to dozens of
publications including Environmental News Network (ENN), Industry Intelligence
i2blog, Green Conduct, NL-Aid, and Solar Feeds. His articles have been featured
in more than 50 publications including Scientific American, The Green Economy
Post, and ITHICA School of Business. Richard has also contributed to a United
Nations Development Program (UNDP) report on the Green Economy in Action.